If a good is a luxury, its income elasticity of demand is.
Positive and less than 1
Negative but greater than 1
Positive and greater than 1
Zero
Under which one of the following circumstances will the firm have to absorb all the increase in indirect tax itself, being unable to pass on any of it to the consumer?
Perfectly inelastic demand
Perfectly elastic demand
Unit elastic demand
Relatively elastic demand
If the demand of the commodity changes at faster rates than change in the price of the commodity, the demand of the commodity will be known as
Perfectly elastic
Inelastic
Perfectly inelastic
Elastic
Revenues from the sale of a good will decrease if
Income increases and the good is normal
The price rises and demand is elastic
The price rises and demand is inelastic
Income falls and the good is interior
A vertical demand curve has
Unit elasticity
Infinite elasticity
Zero elasticity
Varying elasticity
Change in the demand of a commodity due to change in the price of the substitute is an example of
Cross elasticity
Price elasticity
Income elasticity
If change in the demand of the commodity is proportionate to change in price, the demand of the commodity will be
Less than unit elasticity
Demand will be more elastic
The higher the income
The lower the price
The shorter the passage of time after a permanent price increase
The more substitutes available for the good.
A state government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price elasticity of demand is
Unity
The price elasticity of demand is defined as the absolute value of the ratio of
Price over quantity demanded.
Change in price over change in quantity demanded.
Percentage change in price over the percentage change in quantity demanded.
Percentage change in quantity demanded over the percentage change in price.
